Kent County reports 2011 foreclosures expected to be on par with 2010

GRAND RAPIDS — This year’s list of proposed property foreclosures against those owing back taxes in Kent County may not be as bad as it looks, but it still isn’t good.

Kent County Treasurer Ken Parrish said this year’s final count of foreclosures is expected to be on par with last year, when the county recorded 152.

Parrish said officials don’t count the number of actual foreclosures until after the March 31 deadline by which property taxes must be paid because state law requires anyone with a potential interest in a property be listed. This includes husbands and wives jointly owning properties, mortgage companies and those holding land contracts that may not have been recorded with the county.

In other words, not everyone listed is a deadbeat.

“People assume anybody on that list owes back taxes when the reality is it includes anybody who has an interest in that property,” Parrish said of this year’s list of 1,344. “That list shouldn’t be considered punitive because we’re merely telling people that a given property could be foreclosed.”

Each year’s list trails the relevant tax year by about 25 months because of the amount of time state law allows property owners to bring their taxes current. The county recorded 102 foreclosures in 2009 and 59 in 2008.

Parrish estimated about 90 percent of those listed will pay back taxes by the March 31 deadline. He said some property owners intentionally push the limit, while others merely need time to get funds together.

“With the economy being what it is, it’s been tough on some people,” Parrish said.

Those with legitimate hardships will have a chance to plead their case to Parrish at a Feb. 8 show-cause hearing where property owners can explain their delinquencies. Parrish said state law allows the county to grant hardship deferrals that delay tax deadlines but don’t cancel debts.

The next step is a judicial foreclosure hearing scheduled for Feb. 17 before Circuit Judge Donald Johnston, who will make a final determination on whether to grant the county’s foreclosure request.

Final court judgments will be dated March 31, so taxpayers have until then to correct any arrears, Parrish said.

“After that, we take ownership of all of the property and then there’s a process of offering it to the state, which has first right of refusal,” Parrish said. “They typically look at property that is adjacent to property they already own. Then it’s offered to the city or township in which it’s located and if they don’t take it, the county has the opportunity to acquire it. If that doesn’t happen, it goes to public auction.”

Out of the 152 parcels foreclosed on last year, only four were not acquired at auction or by the local unit in which they were located, Parrish said. The county’s new land bank created in late 2009 in the future may purchase properties to which the county could entice developers using state or federal grants, but for now has no funds to do so.

Local real estate agents say the condition of properties foreclosed for non-payment of taxes runs about the same as any other type of foreclosure. Some properties are found in pristine condition while others show the bitterness of foreclosure in the damage left by previous owners.

They add that properties acquired at tax auctions present opportunities for buyers, but also risks. While properties can sometimes be acquired for the price of back taxes, other encumbrances such as mechanics liens or unpaid water bills can create headaches later.